Says while average lending rates have dropped, affordable credit remains out of reach for many households and businesses President William Ruto speaks during the 60th anniversary celebrations of the Central Bank of Kenya (CBK) at the Institute of Monetary Studies in Nairobi/ PCS President William Ruto has challenged Kenya’s banking sector to turn the country’s improved financial stability into cheaper and more accessible credit for households and businesses.
The President said high borrowing costs continue to constrain investment, entrepreneurship and job creation despite an improving economic environment. “Kenya does not need strong banks merely for the sake of having strong banks. We need strong banks capable of financing a strong economy,” President Ruto said on Thursday evening during celebrations to mark the 60th anniversary of the Central Bank of Kenya (CBK), at the Institute of Monetary Studies in Nairobi.
He urged banks and other financial institutions to lower the cost of credit and expand financing to small businesses and ordinary Kenyans, arguing that financial stability should translate into greater economic opportunities and improved livelihoods. “Our financial institutions must become better at converting Kenyan savings into Kenyan production, including financing farms and factories, businesses and infrastructure, technology, exports, and enterprises,” he said.
President Ruto noted that lending rates have declined, with the average lending rate standing at 14.39 per cent in July, but said the cost remains too high for many households and businesses. The call comes as the banking sector operates in an environment of easing monetary conditions following a period of tight policy aimed at containing inflation and stabilising the shilling.
Ruto credited CBK with helping stabilise the economy after his administration took office in September 2022 amid high inflation, elevated food and energy prices, exchange-rate pressures and looming external debt obligations. “The Central Bank tightened monetary policy as inflation and exchange rate pressures intensified.
Government confronted external financial challenge, including the 2024 Eurobond maturity, while pursuing fiscal and structural measures to strengthen the economy,” he said. The President said the CBK’s response to the economic pressures demonstrated the importance of strong and independent institutions in maintaining financial stability during periods of volatility.